According to a recent report by Ernst & Young Mining Eye titled 2009: the year of survival and revival – mergers, acquisitions and capital raising in the mining and metals sector, Nedbank Capital came fourth out of all the major mining project finance lead arrangers for the year. The report, which shows that project finance was severely impacted by the global economic downturn, points out that total 2009 deal value dropped to $5.4 billion, compared to the almost $8 billion closed globally in 2008.

Nedbank has been successful with a number of closed deals during the year, among them: the re-financing of a R1.92 billion revolving credit facility for Kumba subsidiary Sishen Iron Ore Co; a $165 million project finance facility for a uranium mining and ore treatment facility at Paladin’s Kayelekera uranium mine in Malawi; and the raising of R4.5 billion for a BBBEE transaction that saw a consortium of investors and community groups acquiring a 24% empowerment stake in Richards Bay Minerals.

According to Mark Tyler, Joint-Head of Mining Resources at Nedbank Capital, the achievement by Nedbank against this negative backdrop is the result of the robust risk management processes put in place by the bank prior to the onset of the economic crisis as well as having actively managed its exposures. This, combined with an absolute commitment to a collaborative, partnership-driven approach, saw Nedbank Capital working closely with its clients and drawing on the extensive local and international expertise and support available across the group.

“While it can’t be denied that Nedbank Capital enjoyed something of a geographic advantage during a period dominated by projects in developing countries,” Tyler points out, “it was undoubtedly Nedbank Capital’s business-as-usual approach that served to inspire confidence in our clients, encourage them to push through with their projects despite the challenges, and contributed significantly to our continued success as a provider of holistic solutions to the African mining industry.

“Nedbank’s ability to provide a range of essential services to mining industry participants – from acquisition and leveraged finance, export credit finance, and project finance, to corporate debt, advisory, and equity and hedging – has seen it develop an enviable reputation as a preferred partner to entities undertaking major infrastructure and mining projects in Africa and the rest of the world,” says Tyler.

“And, in addition to enabling us to remain successful during the recent difficult economic period, this proven ability also positions us well to take full advantage of the anticipated, albeit gradual, return to favour of bank-driven project finance as the mining sector enjoys the benefits of improving economic conditions and the prospect of a return to positive cash flows in the months and years ahead.”